INVESTMENT PHILOSOPHY : Client Assessment

At Maxim we understand our role as investment manager requires that we build portfolios using a disciplined process designed to maximize long term returns while closely managing the risk of significant loss. When building investment portfolios, we start by learning about your unique financial goals and circumstances. We listen closely to fully understand your return requirements, investment time horizon, cash flow needs, and overall comfort level before we set out to design your portfolio. This assessment process yields a client's overall investment objective, which generally outlines the portfolio balance between growth (stocks) and income (bonds).

This target investment objective is a crucial first step in building your investment portfolio as stocks and bonds tend to move in opposite directions; combining them provides a valuable hedge which lowers risk by limiting losses during market downturns. Clients with a long-term time horizon can still expect higher returns from an aggressive portfolio of stocks. Our goal is to educate clients about investing in order to help them reach their investment goals.

INVESTMENT RISK AND REWARD
Annual Returns 1970-2005 (1)	S&P 500 Index	Aggressive Portfolio (95% stocks)	Moderate Portfolio (60% stocks)	Conservative Portfolio (20% stocks)
Losses (in years)	8 of 36	8 of 36	6 of 36	0 of 36
Losses over 10%	4 of 36	5 of 36	1 of 36	0 of 36
Worst Year	-26.5%	-23.8%	-12.9%	0.1%
Average	11.1%	11.2%	10.5%	8.6%
Long-Term Estimate	8.5%	8.5%	6.9%	4.7%

This table clearly demonstrates the benefits of a moderate portfolio objective. Over this 36 year period, the moderate portfolio experienced only one year with a loss over 10%, compared with 5 years of losses for the aggressive portfolio.

1. Data provided by Ibbotson Associates, Inc. Returns include reinvestment of dividends and interest. The portfolios are weighted averages of indices representing each asset class and are rebalanced annually. Aggressive is 50% large-cap stocks, 20% small-cap stocks, 25% international stocks and 5% cash. Moderate is 35% large-cap stocks, 10% small-cap stocks, 15% international stocks, 35% bonds and 5% cash. Conservative is 15% large-cap stocks, 5% international stocks, 50% bonds and 30% cash. The indices representing each asset class are S&P 500 Index (large-cap stocks); Russell 2000 Index (small-cap stocks); MSCI EAFE Net of Taxes (international stocks); Lehman Brothers US Aggregate Bond Index (bonds); and Citigroup 3-Month U.S. Treasury bills (cash). CRSP 6-8 was used for small-cap stocks prior to 1979, Ibbotson Intermediate-Term Government Bond Index was used for bonds prior to 1976, and Ibbotson 30-Day U.S. Treasury bills was used for cash prior to 1978.